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October 28, 2013

Tax Uncertainty Drives Record DAF Grants: Fidelity Charitable

Nearly half of assets added to donor-advised funds were tradable

Fidelity sign. (Photo: AP)

Fidelity Charitable recorded record incoming contributions and outgoing grants to nonprofits during the first nine months of 2013, the national donor-advised fund sponsor reported.

Fidelity Charitable took in nearly $1.3 billion in contributions, a 5% increase from the same period in 2012.

It also made some 308,000 grants to charities through September, totaling nearly $1.3 billion, a 20% increase in grant volume and a 33% increase in grant dollars over the same period last year.

“Last year, amid the uncertainty surrounding tax laws for 2013, we saw many donors increase their giving and adopt a donor-advised fund for the first time,” Fidelity Charitable’s president, Sarah Libbey, said in a statement.

“It’s gratifying that our new donors have jumped right into the grantmaking process and, like our established donors, are actively using their charitable account to support the causes that are important to them.”

This donor activity was in line with a trend Fidelity identified in a survey last year.

Fidelity said that through the first three quarters of this year, 23% of outgoing grant dollars were part of a grant of $1 million or larger, compared with 15% in the same period in 2012.

“As more donors complement their private foundations with a [Fidelity] Giving Account or establish a Giving Account instead of a private foundation, the number of large accounts has grown,” Libbey said. “So we’re now seeing a corresponding uptick in large grants.”

Donors continued to regularly leverage appreciated assets to fund their Giving Accounts, with 48% of contributions coming in the form of publicly and non-publicly traded assets, the report said.

Advisors also continued to introduce donors to DAFs in supporting their clients’ charitable planning. More than 60% of new accounts and upward of 70% of contributions could be attributed to an advisor referral, Fidelity said.

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